In what is being touted as a significant positive shift in the gaming and esports industry, Allied Gaming witnessed a notable 15.6% increase in its annual revenue, totaling $7.4 million for the fiscal year ending December 31, 2023. The commendable growth can be largely attributed to a strategic reduction in costs which, in turn, considerably decreased their net loss.
Internationally recognized for its immersive gaming experiences and dynamic presence in the esports segment, Allied Gaming comprises three principal divisions: Allied Esports International (AEI), Allied Mobile Entertainment (AME), and Allied Experiential Entertainment (AEE). As a driving force within the industry, Allied Gaming prides itself on owning leading global properties, orchestrating live events, and providing high-caliber production services.
Their crown jewel, the HyperX Esports Arena Las Vegas, stands as a testament to their prowess in the industry, further bolstered by their innovative mobile gaming platforms like the Allied Esports Trucks, featuring 18-wheel mobile gaming arenas that captivate audiences across varied geographies.
Setting the course for continued expansion, Allied Gaming’s CEO, Yinghua Chen, lauded the “substantial” progress made in the past year. Chen spotlighted the pivotal acquisition of a majority stake in Beijing Lianzhong Zhihe Technology completed in August, a maneuver propelling the company into a formidable stance for the upcoming fiscal period and marking significant milestones in Allied’s journey of growth.
“We made substantial progress during fiscal year 2023 and have entered fiscal year 2024 in a position of strength,” Chen remarked. “AEI, AME, and AEE are all poised for growth as we execute on our strategic objectives this year.”
Chen further expressed optimism for the year ahead, confident in the company’s strategic trajectory. With the integration of Beijing Lianzhong Zhihe Technology into its corporate fold, the expansion of AEE’s event footprint in Asia, and the sustained demand for AEI’s properties and content, Allied Gaming anticipates a promising fiscal year 2024.
Analyzing the 2023 fiscal performance reveals that in-person activities continued as the main revenue generator, bringing in $5.0 million, remarkably consistent with prior-year figures. However, what really propelled revenue growth were the upticks in other sectors within the company’s ecosystem. Multiplatform content revenue experienced a staggering 42.9% increase to $2.0 million, while casual mobile gaming churned out $698,522—a new addition to Allied’s revenue streams.
Cost management played an equally pivotal role in the company’s financial recalibration. Overall expenses across Allied’s operations dipped by 21.0% to $14.3 million. A significant component of the savings came from a 29.6% reduction in general and administrative expenses, which are traditionally the company’s largest outlay, now down to $7.6 million.
This aggressive cost curtailment led to a substantially lower operating loss of $6.6 million, a marked improvement from the previous year’s $11.8 million. Allied’s bottom line also gained from ancillary income contributions, helping to further alleviate overall loss.
Specifically, external income chipped in an additional $46,684, while interest income brought in a substantial $3.0 million. This harmonized financial strategy ultimately yielded a net loss of $3.6 million, in stark contrast to the heavier $10.8 million net loss reported in the previous fiscal cycle.
Moreover, there was an observable improvement in adjusted EBITDA loss, shrinking from $8.6 million in 2022 to just $4.6 million. The year closed on a virtuous note for Allied with Q4 presenting itself as an especially prosperous quarter. Q4 revenue hit a high note of $2.1 million, a 75.0% surge driven significantly by the Beijing Lianzhong Zhihe Technology acquisition.
While total expenses in the final quarter rose slightly to $4.0 million, the enhanced revenue profile enabled a reduction in operating loss from $2.7 million to $1.9 million. Additionally, other income totaled $30,730 and interest income amounted to $792,103, leading to a bottom-line net loss of just $1.1 million—a favorable comparison to the previous year’s $1.7 million.
When adjusting for EBITDA, the loss shrank from $1.7 million in the prior year to $1.2 million, evidencing Allied Gaming’s disciplined approach and successful navigate through a transformative fiscal year. With a solid financial footing and an eye toward innovation and growth, Allied Gaming confidently strides into the new year with commanding optimism and fortified strategies for continued industry dominance.
